D.C. Circuit expands supply chain risk determination scope in Anthropic case

The U.S. Court of Appeals for the District of Columbia Circuit on September 25 denied Anthropic's petition for review in Anthropic PBC v. U.S. Department of War, upholding the Department of War's decision to exclude Claude from the government supply chain. The court interpreted broadly the definition of supply chain risk in the Federal Acquisition Supply Chain Security Act of 2018 (FASCSA), holding that the conduct listed in the statute does not require malice or covert intent, and that risk can be found by looking at what Anthropic did rather than why it did it. Previously, the Northern District of California had on August 27 granted summary judgment in favor of Anthropic in a separate lawsuit based on 10 U.S.C. § 3252, finding the determination constituted unconstitutional retaliation. Judge Henderson, in dissent, argued FASCSA was intended to target malicious actors, and that under the majority's interpretation, a contractor could be found to be manipulating or refusing merely by asserting limitations in contract license terms.